Ophthalmology Odos - Emr

ELECTRONIC MEDICAL RECORDS FOR EYE CARE INVESTMENT OPPORTUNITIES Executive Summary The next two years will see explosive growth in implementations of electronic medical records (EMR) technology, thanks to federal incentives made possible by the American Recovery and Reinvestment Act (ARRA) of 2009. Investors looking for opportunities to capitalize on this funding are advised that $19 billion is currently allocated to providing incentives for medical practitioners to adopt EMR solutions for managing patient records. Currently, the majority of EMR solutions do not address the needs of specialized fields of medicine such as the eye care industry. The ODOS-EMR is a proven, off-the-shelf product designed by a practicing ophthalmologist to make medical records management faster, easier, and more efficient. It has been field-tested within a multiple-provider practice and is ready for sale. For the over 50,000 practicing ophthalmologists and optometrists in the United States, it offers an attractive alternative to the generic EMRs that currently dominate the market, as it is a cost-effective solution tailored to the specialized needs of the eye care field. With over $2 billion of funding available to these practitioners alone, the ODOS-EMR solution offers a solid opportunity for investors. Because of the sliding scale nature of the incentive payment structure, practitioners who adopt early will benefit most, as will investors who seek early returns. The ODOS-EMR solution is ahead of the curve both in addressing the needs of eye care providers and in its potential to become the market leader for eye care-specific EMRs. It is poised to become the first choice of providers looking to maximize their government incentive payments. Early adopters must have a system in place in 2010 in order to receive full benefits, so the investment window is short for this high potential opportunity. Overview The American Recovery and Reinvestment Act of 2009 has moved the subject of electronic medical records (EMRs) from the “nice to have . . . someday” category to the forefront of medical practices’ capital purchase plans. The bill includes $147.7 billion allotted to the health care industry, with $19 billion of that intended for direct payments to health care professionals who adopt EMR systems. Incentives of up to $44,000 each for health care providers ($48,400 for rural providers) who implement EMRs will be distributed on a sliding scale starting in 2011 and ending in 2015. Early adopters will benefit most. Practitioners who do not implement EMRs will experience up to 5% cuts in Medicare and Medicaid reimbursements. Many current EMR solutions are rather “one size fits all” in that, while designed to manage and handle medical records, they are not tailored to the needs of individual health care specialties. This approach does not serve specialists well, since the information needed to document patient visits in specialty fields may be radically different from that required by primary care doctors. In the eye care field, much of the information that is relevant to patient care is unique to this specialty. A solution that more specifically addresses the needs of the eye care industry offers attractive advantages both to the ophthalmologists and

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optometrists who will use it and to investors looking to capitalize on the opportunities made possible by the ARRA legislation. Eye care is a multi-billion dollar industry that serves the needs of millions of patients in the United States. It is a highly specialized sector, with continuous development of advanced technologies to serve the needs of patients and practitioners alike. Billions of dollars are spent every year on products to support eye care, in areas that include optics, pharmaceuticals, diagnostic equipment, and surgical products. Now, with the signing of the ARRA by President Obama, information technology will move near the forefront of spending by the industry. EMR systems exist that are tailored to the eye care industry, but these tend to be complex and cumbersome. Most will create and store records with the information appropriate to the field. However, the efficiency with which a practitioner can see patients is decreased when switching from paper charts to most of these systems. Practitioners must spend significant amounts of time entering data at a terminal, or pay a scribe to accompany them and enter the data as they see patients. For a practitioner seeing forty to sixty patients a day, any additional time required by documentation becomes a significant burden and cost. The ODOS-EMR product is an electronic medical records database that was designed by a practicing ophthalmologist to minimize the time taken by data entry, and maximize speed and efficiency in creating, storing, and managing medical records by eye care practitioners. Because of its ability to decrease time spent entering and managing records, the system frees doctors to see more patients, shortening the period needed to achieve return on investment and increasing overall revenues. The ODOS-EMR system is available now for deployment and has been proven in actual implementation within a clinic of eight eye doctors. By bringing the product to market now, investors can expect exponential growth in sales in conjunction with eye care providers moving to take advantage of the ARRA incentives. Currently there are over 18,000 ophthalmologists 1 and 33,000 optometrists 2 in the United States alone. At the maximum rate of $44,000 per provider, the money available from the government for EMR purchase within this specialized field totals $2,276,252,000. Because EMR systems will presumably continue to be used beyond the initial adoption period, systems that compete successfully in the initial phase can expect to realize even greater long-term profits in the future. ODOSEMR is a proven, developed product, and is therefore well positioned to compete for a large share of the initial EMR purchases in the coming few years as well as the long-term profits from continuing licensing and service in this market. Regulatory Environment The American Recovery and Reinvestment Act of 2009 will create a short-term spike in demand that will precipitate a mass-conversion to EMR systems in the next few years and cause enormous growth in the EMR industry. Whereas a small percentage of practices had EMR systems prior to the ARRA, in five years the majority of them will. 1 2

18,733, per the AMA Physician Masterfile, 2005 (AMA #312.464.5000) US Bureau of Labor Statistics, 2006

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Under ARRA, providers who implement a qualified EMR system can receive up to $44,000 each in incentives if they are early adopters. By implementing a qualifying EMR solution in 2010, providers can become eligible for payments starting in 2011, with benefits paid over five years. Providers can receive up to $18,000 in incentive payments in the first year alone. The following chart illustrates the incentive payment schedule: Year of adoption

Payment 2011

Payment 2012

Payment 2013

Payment 2014

Payment 2015

Total paid

2011

$18,000

$12,000

$8,000

$4,000

$2,000

$44,000

2012

0

$18,000

$12,000

$8,000

$4,000

$42,000

2013

0

0

$15,000

$12,000

$8,000

$35,000

2014

0

0

0

$15,000

$12,000

$27,000

2015

0

0

0

0

0

0

Because the greatest incentive payments will go to practitioners who adopt EMR systems early, the majority of purchases of these products will occur in the next few years. Because of this, there are significant advantages for vendors who already possess an EMR platform over those who are coming to the market late. Companies with the ability to penetrate the market early will possess a huge advantage, as late-comers will miss the initial wave of EMR adoption. Early market leaders will benefit the most from the conversion to EMR. Once a practice has adopted an EMR system, it will likely stay with the same vendor, as these solutions are expensive and difficult to implement. Conversions from one EMR system to another will be infrequent. Vendors who capture clients early will enjoy a continuing revenue stream from licensing and support that will be difficult for competitors to disrupt. Moving quickly in this market is therefore essential. Because ODOS Industries already has a proven product, it will be able to compete early for the initial wave of EMR adoption in the eye care industry, and out-maneuver many of its competitors. Certification The American Recovery and Reinvestment Act requires that practitioners demonstrate “meaningful use” of a “certified” system to qualify for the incentive bonus. The ARRA specifies that the Secretary of Health and Human Services will determine what qualifies as “meaningful use,” and “certified.” As of this writing, the new Secretary, Kathleen Sebelius, has not yet defined these terms, but it is likely that the Certification Commission for Healthcare Information Technology (CCHIT), an independent, private agency partially funded by the U.S. government, will be the certifying body. CCHIT currently has criteria for certification of primary care, cardiology, and emergency medicine EMRs, but no criteria for eye care EMRs. Because CCHIT does not plan to establish

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certification criteria for eye care EMRs until 2011, after the payment of the first incentive bonuses, it is likely that ophthalmology/optometry EMRs will be exempted from the “certified” criterion, at least initially. Standards do exist for ambulatory (i.e. primary care) EMR certification, and the ODOS-EMR solution largely meets these standards. As the standards for eye care-specific EMR certification become clearer, certification will be a major focus of company efforts. Customers who purchase an uncertified version of ODOS-EMR can be easily upgraded to the certified product using data import/export functions, if necessary. EMR Benefits More and more providers, especially those just entering the medical field and accustomed to online information sharing and data look-up, recognize the merits of a “paperless” system of records management. In addition to qualifying a practice for discounts and incentives, a well-designed EMR provides many advantages over the old, manual system of filing, updating, and handling patient records: • • •

• • •

•

Improved documentation improves compliance with Medicare and private insurance standards, allowing the practitioner to increase collections and decrease audit risk. Charts are legible, meeting regulatory standards, improving patient safety and decreasing malpractice risk. Both the number of staff and the amount of time required for maintaining medical records are reduced. Staff members no longer waste expensive hours looking for charts. Surgical scheduling is simplified. Improved legibility, reduced transcription errors, and easy visibility of important medical information all contribute to reduce medical errors. Charts are accessible anywhere with an internet connection and the appropriate software. Practitioners can access charts when on call at home, or from the hospital surgical suite. Patient confidentiality is improved. Access to information can be restricted by privilege sets, on a “need to know” basis, improving federal privacy standards compliance.

The ODOS-EMR also improves the speed and efficiency of documentation of patient encounters, surgical planning, communication with other providers, and coding of charts. The ease with which providers can perform these functions differentiates it from other products, which tend to be more complex, and have steeper learning curves. Which EMR? Electronic medical records solutions will be judged by practitioners according to their ease of use, speed, and efficiency. A practicing ophthalmologist may see from thirty to sixty patients a day, with some seeing even more. Revenue from an average patient visit to the practice may range from $150 for a comprehensive ophthalmologist to $400 for a retina surgeon. Efficiency in the clinic makes an enormous difference to practice revenue. When a practitioner is able to see, on average, a few more patients a day, he or she can realize

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large gains in revenue and compensation. A comprehensive ophthalmologist who works forty-five weeks per year will gross an additional $33,750 by seeing just one more patient per day; for the retina surgeon, $90,000. By contrast, any medical records system that slows the practitioner down can have a devastating effect by decreasing revenues by the same amounts. The ODOS-EMR was designed with the understanding that doctor time is the greatest expense of any practice. Anything that slows a doctor down in the clinic decreases the number of patients he or she can see, and adversely affects practice revenues. Both the time required to set up and learn a new system, and the time required to operate it when seeing patients, are major factors that most practices will consider in choosing their EMR solution. Because the ODOS-EMR was designed to be intuitive, simple to operate, and powerful, it will contribute to efficiency, not detract from it. This solution will therefore have a significant advantage over more complex and cumbersome systems that are harder to learn and slower to operate. ODOS-EMR Approach ODOS-EMR is an electronic medical record database that recognizes the importance of a doctor’s time. It is simple and intuitive to operate, so there is a short learning curve. Designed to be easy to configure, it can adapt easily to a physician’s practice style, surgical planning needs, and work flow. Above all, it is efficient and fast at documentation and planning, freeing up the provider to see more patients, to document his or her encounters more thoroughly, and to spend more time doing the high-value things an eye care provider does. The ODOS-EMR system, unlike many other electronic medical records systems, is designed specifically for use by eye care professionals. Created by a practicing ophthalmologist and field-tested for several years within his own practice, the system has had time to mature and develop functionality tailored to the needs of this specialized field of medicine. For instance: •

•

•

• •

Eye care differs significantly from other branches of medicine in the data required for examinations, prescriptions, surgical scheduling, and other tasks. Generic EMR applications do not adequately address these needs. ODOS-EMR does. Written by an ophthalmologist specifically for ophthalmologists and optometrists, it is an easy-to-learn and efficient system. It works for the user, not the other way around. Very little of the practitioner’s time is spent on data entry. The system is highly customizable. Based on the Filemaker platform, ODOS-EMR easily adapts to the practice patterns of its user. It allows integration of existing hospital forms, surgery consent forms, and consultation requests into the application, ensuring seamless integration with the needs of the practitioner. ODOS-EMR applications come with local physician and pharmacy data already built in, eliminating the need for the clinic staff to build the contact database from scratch. Other medical systems interface with ODOS-EMR, allowing easy import of data from diagnostic devices, cameras, and hospital systems.

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Designer Dr. Kevin Cranmer, the designer of the ODOS-EMR solution and founder of ODOS Industries, is a Harvard-trained, board-certified ophthalmologist practicing in Norwich, Connecticut. After completing his residency at Wills Eye Hospital in Philadelphia, one of the top three eye hospitals in the United States 3, Dr. Cranmer quickly recognized the need for better medical records management to improve the quality of patient care and to decrease the potential for medical errors. Using his undergraduate degree in engineering and his experience as an independent database consultant, he developed the original ODOS-EMR for use in his own practice. The system returned significant improvements in the efficiency of seeing patients, scheduling surgery, and ensuring the most efficient and safe care for his patients. Dr. Cranmer saw the potential to expand ODOS-EMR’s use to other eye care professionals, and founded ODOS Industries, Inc. for that purpose. ODOS Product Differentiation The ODOS-EMR solution offers significant advantages over other EMR products and powerful incentives to practices looking to implement a whole new method of records management. Among these are: •

•

•

•

•

ODOS-EMR is faster than competing systems. The greatest cost in any practice is doctor time. The ODOS solution allows physicians to see more patients, improve patient satisfaction, and increase revenues for the practice. The program is intuitive and easy to use. Training time for doctors and staff is measurably less than with other solutions, including eye care-specific systems. Staff members who have used the system in Dr. Cranmer’s clinic generally required less than an hour of training to become proficient. Older physicians have had no trouble adapting to ODOS-EMR. ODOS-EMR allows for customization to the specific practice. Rather than a rigid set of screens that cannot be altered, the individual practitioner can set up the program to best meet his or her needs. The software was written from the standpoint of a practicing ophthalmologist, from an insider perspective within the eye care field. This offers priceless advantages over solutions that were not written specifically for eye care practitioners, or that were written by database developers who were not eye care professionals. ODOS-EMR is competitively priced against existing off-the-shelf solutions.

ODOS Industries: Plans for Growth Currently the product is tested and ready for widespread marketing efforts and installation. Investment funding will be used to: • 3

Drive sales

US News and World Report, 2009 rankings.

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Attain CCHIT certification, when standards for certification are available Develop the HL-7 interface, which allows interoperability with EMR solutions in other practices, hospitals, and outside facilities Develop an iPhone reporting application, allowing remote reporting and access to the system

ODOS Industries is currently ready to market this fully-tested and market-ready product directly to the database of eligible providers suited for this solution, as well as to distribute, install, and train practice staff on the ODOS-EMR software. Opportunities for investors The American Recovery and Reinvestment Act of 2009 has created the “perfect storm” in the healthcare IT industry. Over the course of the next several years, there will be a massive move by medical practices to electronic medical records. The EMR industry will experience unprecedented growth, and there will be a scramble by companies with EMR products to establish market share. Large profits are possible in the initial period as medical providers take advantage of government incentives to switch to electronic records. These profit streams will continue for companies who establish contracts with providers early. The eye care industry provides a niche market for EMR vendors, with enormous potential profit margins. Eye care technology enjoys large margins on sales because of the highdollar, specialized nature of the field and the significant barriers to entry for competition. The eye care field is unlike any other field of medicine; vendors who try to adapt information technology from the general medical market to this specialized sector will likely not satisfy the needs of eye care providers. For companies who are tightly focused on this area, however, there is great potential for initial and continuing profit. ODOS Industries, Inc. has a ready-for-market product designed exclusively for eye care. It is proven in actual use, and allows eye doctors to see more patients, more efficiently, and with greater ease than a paper chart or competing products. It requires only the investment needed to market it aggressively. Investors seeking to capitalize on the American Recovery and Reinvestment Act of 2009 have an opportunity to realize large profits in the eye care sector with the ODOS-EMR product. Investment in ODOS Industries, Inc. will allow the company to market the ODOSEMR to a larger segment of the eye care industry and establish a greater market share during the initial critical period while practices choose their vendors. Investors will benefit from the initial profits from sales and installations of the ODOS-EMR, and will realize longterm returns from customization, support, and licensing purchased by customers. Investors interested in discussing opportunities should contact Kevin Cranmer, MD, at [email protected]. CONCLUSION The health care industry will witness tremendous forward movement in 2009 and 2010 toward implementation of EMR solutions. Health care practitioners are highly incentivized to

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move forward with evaluating and choosing appropriate solutions for their own practices. Those who do not will be penalized, both by losing out on the payments available through the ARRA incentives, and through reduction in payments for Medicare and Medicaid claims. ODOS Industries, Inc. is well positioned to become the market leader in EMR solutions for the eye care industry. ODOS-EMR offers an excellent opportunity to investors looking for a solid, ready-for-market product with high-return potential within a relatively short time frame. Its potential for steady, ongoing profits after the initial spike in implementations caused by the American Recovery and Reinvestment Act of 2009 is unlimited.